Thursday, August 22, 2013

Natural Gas: Storage Tealeaves for 8/22/13

The front futures are up 4 cents at $3.50. The day's high has been $3.524 which is the highest since a small down gap the last week of July.

From Energy Metro Desk via the CME:

Previewing the Energy Information Administration's 8/15/13 report.
Each week, we poll 40 professional storage forecasts for our weekly Natural-Gas Storage Box Scores (as seen in each bi-weekly issue of Energy Metro Desk*). This is North America's biggest and most comprehensive natural-gas storage survey and report.

Editors Forecast This Week: +72 Bcf
Average: +65.4 Bcf
Median: +64 Bcf
Range: +60 to 77 Bcf

Natural Gas Storage Tealeaves for 8/22/13
This week is going to be a bit tricky, we think. While the weather alone points to a build in the lower 60's range, the past few weeks of surprises, reclassifications and the like also suggest something quite a bit higher. We heard great arguments this week for downside and upside risk; and that's no line. Considering the flows, the imports, and the weather, we think the EMD consensus should be spot on at 65.4. Now granted, this is roughly 4 Bcf lower than most of the big surveys (69 to 74 Bcf) and also the survey index (69.1). This week the survey category HighBaller was the SNL Survey and the Survey category LowBaller was our own EMD Consensus at 65.4 (med 65). Lots of confusion in the market is our read; though the range was less than 20 Bcf (60 to 77 Bcf) the spread between the three surveys we track was well beyond the 3 Bcf signal. The spread was 4.7 Bcf and so, there is an expectation for a surprise out of EIA. That is, a report 5 Bcf higher or lower than the market. But, which direction? Oddly, this week our editor is high at 72 Bcf; he senses a bearish surprise of sorts. The consensus is all about the bulls however. EIA seems to be coming in higher more often than not these days, but, it may be time for a low one nonetheless. So, we're now thinking that the bias is leaning lower this week. So, in effect, it may be closer to our 65.4 consensus than the market average of 69 Bcf. A surprise should be no surprise. -the editor

Weather Tealeaves
Forecast Courtesy of the Commodity Weather Group (
Thought of the Day: Midwest Heat Focus
The European model guidance overnight shifted stronger with Midwest warming next week and also into the 11-15 day. This continues to widen the divide between the cooler American ensembles. The European model pattern is more consistent with the current situation seen this week, so it is again favored. This leads to warmer changes with low 90s in Chicago early to middle next week. The situation still looks warm in the 11-15 day for the Midwest per the Euro and Canadian ensembles, but wetter weather offers more limits by that point to high temperatures. Texas edges slightly warmer for next week and in the 11-15 day, but no major heat anomalies are expected. The West is mixed, but California is warmer in the short-term, and we are watching some Southwest monsoon cooling risks days 4-6....MORE

Today's action via FinViz: